Think Piece

Inter-Relationships between the Investment Law and Other International Legal Regimes

International investment law coexists with a wide range of other substantive regimes of international law, including human rights law, humanitarian law, environmental law, intellectual property law, and various regional legal orders. The interactions between investment law and these other regimes have come to be seen as increasingly problematic, with stakeholders questioning the legitimacy of international investment law and even the purposes of the international legal order more generally. As international investment tribunals have, in the eyes of many observers, failed to adequately take into account these other substantive norms of international law, concerns have arisen that international investment law privileges the treaty-based rights of investors over the rights of states and, particularly, the values embodied in other areas of international law, such as human rights and environmental protection. Such concerns about the interaction of investment law with other substantive areas of international law are particularly acute today given the ongoing negotiation of “mega-regional” investment agreements (often embedded in trade deals), that have sparked considerable backlash. The negotiation of the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), both of which are expected to include investment provisions, has generated significant political acrimony.

While reforms are needed to ensure that investment law fully engages with other substantive fields of international law, scrapping the present investment law system or undertaking significant alterations to the substance of that system would be unnecessary overreactions to manageable challenges. A new generation of investment treaties provides far more treaty-based guidance accepted by states to balance investment protections and other substantive norms of international law. This new generation of treaties offers the prospect of a more balanced, better integrated, and more effective international investment law regime. In the meantime, jurisprudential innovation that pushes arbitrators to engage with and balance competing legal rules is necessary. More radical changes to the system, such as allowing states or non-state actors to bring claims against investors are likely to be counterproductive and might even undermine the viability and purposes of the investment law system itself. However, the potential inclusion of a broad, but carefully tailored, clean hands defence for manifest breaches of critical provisions of domestic and international law by investors is worthy of further consideration.